Trying to decide between a TIC and a condo in San Francisco? You are not alone. With older buildings, unique ownership structures, and strict local rules, the right choice can shape your financing, your risk, and your resale options. This guide breaks down how each option works, what lenders look for, and what to check before you write an offer. Let’s dive in.
What you actually own
TIC basics
In a Tenancy in Common, you buy a percentage interest in the entire property and receive contractual rights to occupy a specific unit. You do not receive a separate deed to a discrete unit. In San Francisco, TICs are common in 2 to 6 unit Victorian and Edwardian buildings that were never split into condos. The TIC Agreement sets rules for use, expenses, repairs, sale procedures, and dispute resolution.
Condo basics
With a condo, you own your individual unit in fee simple and a pro rata interest in common areas like the roof and hallways. Each condo unit is a separate legal parcel with its own deed. Condos are governed by CC&Rs, Bylaws, Rules, and a Board of Directors that manages the HOA budget, reserves, and insurance.
Co-op at a glance
Co-ops are less common locally. A corporation owns the building and you buy shares, paired with a proprietary lease for your unit. Boards often have strong approval rights and can limit subletting. Financing is more specialized.
Financing differences in San Francisco
Lender availability and terms
- Condos: Broad lender participation. Conventional loans are common, and FHA or VA financing may be possible when the project qualifies. Lower down payment options can be available.
- TICs: A much narrower lender market. Many mainstream lenders do not offer TIC loans or require specialized programs. Expect larger down payments, potentially higher rates, and stricter terms. Some TICs have a single master loan; others may have separate TIC unit loans, but acceptance varies by lender.
- Co-ops: Financing is a niche product tied to the building’s financials and board policies.
Practical takeaways
- If you need a smaller down payment or want access to FHA/VA options, condos generally offer more paths.
- If you are exploring a TIC, speak with a lender or mortgage broker who routinely closes TIC loans in San Francisco before you tour in earnest. Prequalification will clarify the down payment, rate expectations, and whether all co-owners must be on the loan.
Title, taxes, and liability
How liens and risk differ
- Condos: Your mortgage is secured by your unit only. If you default, the lien impacts your unit, not your neighbors’.
- TICs: Title often shows multiple owners on a single parcel. There may be a master mortgage on the whole property. If one owner on a shared loan defaults, others can be affected. The TIC Agreement may include indemnity provisions that create shared exposure.
Property tax and reassessment
Under California rules, changes in ownership can trigger reassessment under Proposition 13. Converting a TIC to condos or transferring fractional interests can have tax implications. Because recording mechanics matter, you should consult a CPA or tax attorney to understand how reassessment might apply to your situation.
Governance and building obligations
Documents that set the rules
- Condos: Review the CC&Rs, Bylaws, HOA budget, reserve study, meeting minutes, and insurance. The HOA can levy dues and special assessments. Nonpayment can lead to an HOA lien and potential foreclosure, subject to legal process.
- TICs: The TIC Agreement is the backbone. It should spell out expense allocation, maintenance responsibilities, subletting rules, sale procedures, and dispute resolution. Ask for the budget, any reserve study, insurance details, and recent owner meeting notes.
Local building and safety requirements
San Francisco has mandatory seismic and soft-story retrofit programs administered by the Department of Building Inspection. Older multiunit buildings, common in The Mission and nearby neighborhoods, may require upgrades that lead to assessments or capital work. Condo conversions can trigger building code upgrades for fire, egress, or seismic items, which can be expensive.
Tenant and rent control considerations
San Francisco’s Rent Ordinance may apply to many TIC and condo apartments. Buyer occupancy, rental restrictions, and tenant protections can affect how you live in or rent the unit. If there are tenants, you should review rent rolls, leases, and confirm coverage with the San Francisco Rent Board.
Resale and conversion realities
Marketability and buyer pool
- Condos: Larger buyer pool and easier financing typically translate to better resale liquidity.
- TICs: Smaller buyer pool due to financing hurdles and the complexity of the structure. TICs often attract buyers prioritizing neighborhood and character at a lower entry price, with the tradeoff of a more limited resale pool.
- Co-ops: Even smaller audience due to corporate structure and board approvals.
Pricing and perceived value
TICs have historically sold at a discount relative to comparable condos, reflecting financing friction and shared-liability concerns. The size of any discount varies by neighborhood, building condition, and market conditions.
Converting a TIC to condos
Conversion is possible but can be complex. You should plan for city permitting and code compliance, lender and title company requirements, and vote thresholds within your TIC Agreement. Existing tenants and rent control can also shape the process. While conversion can improve liquidity and financing access for future buyers, the initial cost and complexity are meaningful.
Quick decision framework for The Mission and nearby
Choose a condo if you prioritize:
- Easier access to financing and lower down payment pathways.
- A larger buyer pool and simpler resale.
- Clearer separation of mortgage liability to your unit.
Choose a TIC if you prioritize:
- A lower purchase price for a comparable unit, often in character buildings in The Mission, Noe Valley, Bernal Heights, or Hayes Valley.
- Willingness to accept shared exposure and more limited financing in exchange for location and size.
- Flexibility to explore a future condo conversion, understanding the cost and timeline.
Consider a co-op if you want:
- A tightly controlled ownership structure and you are comfortable with strong board oversight and specialized financing.
Due diligence checklist before you write an offer
Core documents to request
- Full TIC Agreement and any Occupancy Agreements, with amendments.
- Recorded deeds showing how interests are held.
- Any master mortgage, notes, and who is responsible for payments.
- Current budget, reserve study if available, recent financials, and owner meeting minutes for the last 12 to 24 months.
- Building insurance declarations page and coverage details.
- Preliminary title report showing liens, easements, and the legal description.
- For condos, the CC&Rs and Bylaws; for co-ops, the proprietary lease and bylaws.
- Utility bills and common expense statements for the last 12 months.
- Rent roll, tenant leases, and any rent control notices if applicable.
- Permit history, inspection reports, code violation notices, and seismic or soft-story retrofit status.
- California disclosure packet, including the Transfer Disclosure Statement and Natural Hazard Disclosure.
Questions to ask the seller or listing agent
- Is there a master mortgage? What happens if one owner defaults?
- Have any owners received partial releases from liability, or are there subordination agreements in place?
- What is the realistic process and estimated cost to convert to condos? Has anyone started this?
- Are there pending special assessments, litigation, or open code violations?
- How have TIC interests in this building and neighborhood resold historically?
- What are the subletting rules and owner-occupancy requirements?
- Do any loans have due-on-sale or cross-collateralization terms that affect resale?
When to bring in local experts
- Real estate attorney with San Francisco TIC experience to review the TIC Agreement, title, conversion feasibility, and closing documents.
- Mortgage broker or direct lender who routinely funds TIC loans to confirm down payment, rate, and whether co-owners must be on one loan.
- Title and escrow team experienced with TIC closings and condo conversion logistics.
- CPA or tax attorney for Proposition 13 reassessment analysis and potential tax impacts of conversion or transfers.
- Structural engineer or licensed contractor to scope seismic, fire, and code upgrades common in older buildings.
- If tenants are present, counsel familiar with the San Francisco Rent Ordinance to evaluate occupancy and leasing constraints.
Final take
There is no one-size-fits-all answer. If you want financing flexibility and easier resale, a condo usually fits best. If you value a lower entry price into a prime neighborhood and are comfortable with shared obligations and a smaller buyer pool, a TIC can be a smart move, especially with clear agreements and strong building diligence. Either way, your best outcomes come from early planning and a team that knows San Francisco’s rules and buildings inside and out.
If you want a local sounding board to compare real units, model financing paths, and map a clean due diligence plan, reach out to KJ Kohlmyer for consultative, neighborhood-first guidance.
FAQs
What is a TIC in San Francisco and how is it different from a condo?
- In a TIC, you own a percentage of the entire property with contractual rights to a unit, while a condo gives you a deeded unit plus a share of common areas.
How hard is it to finance a TIC purchase in San Francisco?
- TIC financing is more limited, often requiring larger down payments and specialized lenders, while condos typically have broader, more flexible financing options.
What risks come with a master mortgage in a TIC?
- If a shared master loan exists and one owner defaults, other owners can be impacted due to shared liability defined in the loan and TIC Agreement.
Can you convert a TIC to condos in San Francisco?
- Yes, but it often requires city approvals, code upgrades, lender and title coordination, and owner vote thresholds, which can be costly and time consuming.
Are TICs usually cheaper than condos in The Mission area?
- TICs have historically sold at a discount versus similar condos due to financing friction and perceived complexity, though the discount varies by building and market.
What documents should I review before buying a TIC?
- Start with the TIC Agreement, any master mortgage, budget and reserves, insurance, title, permits and violations, rent roll and leases, and required California disclosures.
